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Chinese e-commerce giant Alibaba sets U.S. IPO

Just as investors eye Alibaba's multi-billion dollar U.S. listing plans, sophisticated rivals are cranking up the pressure on the China e-commerce giant, particularly in the mobile space.
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James R. Healey, USA TODAY
7:29 a.m. EDT March 17, 2014

The corporate logo at the headquarters compound of Alibaba Group in Hangzhou in eastern China's Zhejiang province.(Photo: AP)

The biggest company you probably never heard of says it will go public with what analysts say could be a huge IPO.

The fancifully named Chinese e-commerce company Alibaba Group said Sunday it will begin the process of an initial public stock offering on the New York exchange soon. Analysts say it could raise $15 billion.

That's a coup for the NYSE and a slap at the Hong Kong exchange, which won't allow the current owners to carve out a controlling interest with special voting shares.

Chinese online retailing giant, JD.com, filed in January for a U.S. stock listing.

Alibaba Group doesn't report its finances. But Yahoo, which owns a 24% stake in the company, said Alibaba's revenue for the quarter ending in September rose 51% from a year earlier to $1.8 billion. That was down from 61% growth year over a year in the second quarter of 2013, and 71% in the first quarter of 2013.

Though the company isn't well-known here, the name is. Ali Baba is a character in Ali Baba and the Forty Thieves, who discovers the key to the thieves' treasure is, "Open, Sesame."

Alibaba Holding began in 1999 as a Chinese shopping site and has spawned a number of business units since, including etao.com, as a "one-stop shopping engine" that lets Chinese consumers comparison shop and buy online.

It has become one of the world's biggest Internet companies and says more than $150 billion worth of merchandise changes hands on its online platforms each year, more than Amazon and eBay combined.

The company began as a service to link Chinese suppliers with retailers abroad and has branched out into retail e-commerce. It is little known abroad but has launched two consumer-oriented services in the United States.

"Alibaba Group has decided to commence the process of an initial public offering in the United States," the company said in a statement. "This will make us a more global company and enhance the company's transparency, as well as allow the company to continue to pursue our long-term vision and ideals."

Analysts have estimated that an Alibaba IPO could raise up to $15 billion and value the company at more than $100 billion.

Hangzhou, China-based Alibaba had previously abandoned plans for an IPO in Hong Kong because the semi-autonomous Chinese financial center's stock exchange refused to change its rules to accommodate the company's unusual management structure.

The company failed to persuade the Hong Kong exchange to grant it an exception from listing rules so that it could maintain a "partnership" structure that lets top executives, who own 10% of the company, retain control of the board.

The company hinted that the door has not completely shut on listing its stock in Hong Kong.